NEW YORK, July 31 (Xinhua) -- U.S. stocks saw broad selloff Thursday following bad news from outside the United States, wrapping up the month lower.
The Dow Jones Industrial Average slumped 317.06 points, or 1.88 percent, to 16,563.30. The S&P 500 declined 39.40 points, or 2.00 percent, to 1,930.67. The Nasdaq Composite Index sank 93.13 points, or 2.09 percent, to 4,369.77.
For the month, the three indices were down 1.6 percent, 1.5 percent and 0.9 percent, respectively.
All ten sectors of the S&P 500 declined, with energy, telecom and financials leading the losers.
Some traders blamed deflationary pressure in Europe and debt default in Argentina for the sharp selling.
Official data showed Thursday that euro-area inflation dropped to 0.4 percent in July, the slowest since 2009, igniting market worries that the European economy is still not healthy enough to support a price rise.
Responding to the data, major stock indices in Europe decreased over 1 percent Thursday, which also weighed on the U.S. stock market.
Argentina, the No. 3 economy in Latin America, defaulted following the failure of last-ditch talks with holdout creditors. Standard & Poor's Ratings Services on Wednesday downgraded the country's long- and short-term foreign currency sovereign credit rating to "selective default" from "CCC-/C."
However, when commenting on the market selloff, Mark Newton, chief technical analyst/Partner at Greywolf Execution Partners Inc. , said "a lot of this started a month ago. So it's not specific to today in general."
"You started to see more and more sectors start to turn down ... Today was the real break. I mean today was price confirmation of a lot of negatives we've seen for the last couple of month," he told Xinhua.
The CBOE Volatility Index, often referred to as Wall Street's fear gauge, spiked 27.16 percent to end at 16.95 Thursday.
On the economic front, in the week ending July 26, the advance figure for seasonally adjusted initial claims for jobless benefits was 302,000, an increase of 23,000 from the previous week's revised level.
The four-week moving average, a smoother gauge, dropped to 297, 250, the lowest level since April in 2006.
Moreover, the Chicago Purchasing Managers' Index for July stood at 52.6, the lowest since June 2013, sharply down from 62.6 in June, the Institute for Supply Management reported Thursday. The Chicago Business Barometer was also well below market consensus. Readings above 50 indicate an expansion.
On the corporate side, ExxonMobil, the world's largest publicly traded oil company, reported before the opening bell that it earned 8.8 billion dollars in the second quarter of 2014, up 28 percent from a year ago, reflecting strong operations and asset divestments. But shares of the oil giant fell 4.17 percent to 98. 94 dollars apiece.
On the previous trading day, U.S. stocks closed mixed after fluctuating narrowly, as investors mulled the U.S. Federal Reserve 's latest policy decision and a strong rebound of the country's gross domestic product in the second quarter.
In other markets, the dollar traded mixed Thursday but recorded a monthly gain as investors await U.S. nonfarm payroll report due Friday.
In late New York trading, the euro fell to 1.3390 dollars from 1.3392 dollars of the previous session. The dollar bought 102.84 Japanese yen, lower than 102.87 yen of the previous session.
Crude price fell as traders shrugged off the geopolitical risks of Ukraine.
Light, sweet crude for September delivery slipped 2.1 dollars to settle at 98.17 dollars a barrel on the New York Mercantile Exchange, while Brent crude for September delivery lost 49 cents to close at 106.02 dollars a barrel.
Gold futures on the COMEX division of the New York Mercantile Exchange fell as investors speculated that an improving U.S. economy provided backing for the Fed to tighten monetary policy.
The most active gold contract for December delivery fell 14.1 dollars, or 1.09 percent, to settle at 1,282.8 dollars per ounce.